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Help For Poor Could Be Sacrificed To Boost Economy

Lisa Zilligen, a single mother and full-time student who receives food stamps, prepares lunch for her three children. Advocates for low-income Americans worry about the impact of cuts to food stamp benefits and other government programs that help the poor.AP

When Congress returns from vacation, there will be lots of talk about stimulating the economy and extending expiring tax breaks, including those for the richest Americans. What will likely get less attention are several programs to help low-income Americans that are also set to expire this fall. That has advocates for the poor worried.

The first warning sign that such programs could be in trouble came in August, when Congress decided to pay for part of a $26 billion jobs bill by cutting future food stamp benefits. Anti-hunger advocates and their congressional allies were upset to find themselves with an uncomfortable choice: support hungry families or unemployed teachers, but not both.

“Quite frankly, I’m outraged that this is one of the offsets,” Rep. Jim McGovern (D-MA) said during debate on the House floor. He said he would back the jobs bill, but only reluctantly. He also vowed to try to restore the food stamps cuts later on.

“This practice of robbing Peter to pay Paul must come to an end,” McGovern said.

But if anything, such tradeoffs are likely to grow as lawmakers face a tough election season, with increased concern about the federal debt and intense growing political pressure to limit spending.

For example, right after Congress voted to cut future food stamp benefits to help pay for the jobs bill, the Senate approved more food stamp cuts to pay for a child nutrition bill. The House has to decide soon if it wants to go along or find another way to pay for expanding the school lunch program.

“There is a definite feeling, given the deficit, that we need to pay for any new legislation and any new expansions of services, and Congress is on a hunt,” says Joy Moses, who handles poverty issues for the left-leaning Center for American Progress in Washington, D.C.

Out Of Work Soon

Moses and other anti-poverty advocates are especially worried about the fate of an emergency fund created in last year’s stimulus bill to employ low-income individuals. States love the new federal aid, which is part of the Temporary Assistance for Needy Families program, and they have used it to subsidize a quarter of a million jobs so far. But the program is set to expire at the end of September.

“Not being able to extend the program is not a good thing,” says Stan McMorris, deputy executive director of the Mississippi Department of Employment Security.

Mississippi is currently working with private companies to employ about 2,600 people who might otherwise be collecting unemployment or other government aid. The purpose of the program is to eventually create permanent, unsubsidized jobs.

But McMorris has already notified companies that no more participants will be signed up because of the impending deadline. He says those currently employed could be out of work soon.

“In the scheme of things, 2,000 jobs in Mississippi is a major, major impact,” he says.

Other states have issued similar warnings about the program shutting down. The U.S. House has voted to extend the fund another year, at a cost of $2.5 billion, but the proposal is stalled in the Senate.

To Spend or to Cut

Deborah Weinstein, executive director of the Coalition on Human Needs, says she is also worried about what will happen with other programs for the poor. One is an expanded child tax credit that Congress approved in last year’s economic stimulus package. It gives a minimum-wage worker with two children a credit of about $1,700 per year. But that credit will drop to less than $300 unless Congress extends the change past Dec. 31.

“That would be a huge blow for a struggling working family at a time when, of course, it’s especially hard to make ends meet,” Weinstein says.

And times could be even tougher if Congress does not continue extended unemployment benefits, which are set to expire at the end of November.

Many Democrats and the Obama administration argue that such spending is needed to spur economic growth. But right after McGovern bemoaned the choice between spending more for jobs or food stamps, Rep. Jeb Hensarling (R-TX) got up on the House floor to complain about the Democrats’ strategy.

“I don’t know if this is stimulus bill part three or bailout bill part four. There’s been so many of them, it’s simply hard to keep track of,” he said.

Republicans, and a growing number of Democrats, think tax cuts -- even for the wealthiest taxpayers -- are the best way to boost growth. That will inevitably pit the poor against some powerful interests, as Congress struggles to balance competing demands.